ALB - Earnings call transcript Q4 2024

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Operator

Hello, and welcome to Albemarle Corporation's Q4 2024 earnings call. I will now hand it over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

Meredith Bandy

Thank you, and welcome, everyone, to Albemarle's Fourth Quarter 2024 Earnings Conference Call.

Our earnings were released after the market yesterday, and you'll find the press release and earnings presentation posted to our website at the Investors section at albemarle.com.

call Sheorey, Kent Chief the Officer; Chief on Neal and Financial me today Masters, are Executive Joining Officer. for Netha Eric Johnson, available Norris, and Q&A. Chief Commercial Chief Officer, are Operations Officer; also

guidance, statements reminder, a this our and statements. constitute some in comments initiatives the that Please cautionary expected materials. today As in applies forward-looking release made note statements performance to company contained the to of call which during including this may some forward-looking and of also strategic Please our outlook, language press measures. our our financial also note refer found non-GAAP Reconciliations earnings call. be presentation, can about earnings

to And now turn I'll call over Kent. the

Jerry Masters

Meredith. you, Thank

of quarter, For EBITDA we of business in year-over-year reported our the all adjusted improvements billion fourth EBITDA million $XXX segments. of with sales $X.X net and an

Turning adjusted full contract our productivity an and higher XXXX. EBITDA line We considerations volumes of and due to achieved with year in significant to improvements, outlook billion the of cost performance. $X.X strong

Our growth, segment initial to sales. volumes, XX% sales guidance project of year-over-year surpassing XX% XX% Energy increase delivered by and increased our successful ramps spodumene Storage driven in a

which generated of our conversion from operating cash We rate million our objective. XX% long-term above operations an exceeding with $XXX also and in in with XX%, is target cash line

of touch each and improving continues capital to on Albemarle in act areas expenditure flexibility. decisively the areas: detail optimizing efficiency, later reducing cost We'll enhancing across conversion network, in key our call. four and more financial these

facility somewhat to placing Qinzhou initiatives, capacity XXXX by global optimize lithium the these and maintenance our shifting lithium announcing carbonate. further conversion conversion midyear our care and As measures network, today, new hydroxide facility we're into of part from including to at Chengdu conversion of

based we to ongoing scenarios. and ranges and $XX per have last efforts to XXXX, providing updated a improved prices, productivity our market we per scenario to including did these kilogram outlook Compared outlook cost. kilogram $XX enhance a to our per new our kilogram $X year, of across on range and reduce lithium are As $XX we due

we range million. Additionally, an outlook the million in measures, decreased and additional to of to in full free CapEx XXXX line year to breakeven we have we $XXX flow by now these spend cash and of $XXX $XXX to further have Thanks expect now sight XXXX. other achieve million, our

remarks our turn market considerations and it year I'll outlook and will long-term more to performance, fourth I'll on Now over conditions. position, who our and Neal, competitive strategic on provide with quarter updates our prepared framework Then details conclude full execution.

Neal Sheorey

and begin Thank full $X.X the fourth you, review a billion, lithium primarily represented a everyone. on and lower year quarter, net market pricing. will good performance quarter sales of Slide Kent, X. XXXX morning, decline which due our year-over-year reported fourth to of In I we with

EBITDA X $XXX an cost EBITDA million, costs. adjusted across quarter were fourth tax Adjusted excluding reflected asset items. loss $X.XX, restructuring charge. or a $X.XX. driven $XXX well that adjusted increase year-over-year reduced of the discrete quarter million was market on Fourth included and per corporate per reduced businesses improvements Earnings sales, pretax charges as Note earnings year's for share a of share as lower last by gains all

pricing, For Full lithium primarily partially decrease were our line EBITDA full in reached considerations. outlook to billion, in volumes. by a sales related the XXXX, year-over-year growth year with marking billion, year robust $X.X net $X.X offset lithium lower

year-over-year our Slide EBITDA performance. the drivers of shows X

adjustments. in driven conclusion at million $XXX The by year's of EBITDA and the agreement result and partially reduced volumes, These costs market higher due adjusted XXXX. mainly higher the and split prices. or JV market offset the and benefit income, between lithium lower was by reduced of from surpassed marketing improvement benefits of The QX spodumene were last specialties volumes lower MARBL volume spodumene COGS pretax EBITDA cost end productivity COGS. and of to pricing lower equity was Our lower

year-over-year also EBITDA business reported adjusted segments, all mentioned, overhead in costs. we corporate and improved lower X Kent As

considerations Slide X. present to Moving We our for outlook XXXX.

did $XX providing kilogram of half per $X of the storage and XXXX on of last XXXX carbonate we fourth the $XX first will energy or that LCE. volume pricing, lithium anticipate and each Within to slightly kilogram business. we expected the market across with observed $XX storage business for pricing ranges LCE outcomes As our on year, based market year-over-year. quarter are pricing we current about three recently the kilogram scenarios year-end market year of per flat lithium LCE, equivalent, higher Energy results about in average ranges of reflect volumes book be XXXX range energy based including We per of mix. conjunction scenario, Storage's have All provided assumed

These our of scenarios illustrate improved business. the Energy Storage stability

and margins worldwide positions productivity sustain lithium resource actions, with year-over-year extensive can we even lower pricing. cost and our our Given

Additionally, benefit maintained we significant leverage with have to pricing increases. potential operating if

kilogram average from last example, range that mid-XX% mid-XX% the were improvement in $XX if the range. pricing market year, LCE, see we XXXX rising to For to margin would similar per to expect we to delivered

XXXX in with of $XXX considerations planned from adjusted projected million. adjusted modeling a to billion $XXX The total million million outlook $X.X expenditures, $XXX in million. XXXX, Ketjen EBITDA now $X.X corporate to Moving of XXXX. Ketjen's million be billion which projected net are to shows EBITDA down to Specialties, in $XXX capital be are $XXX expected billion X. decrease for to $X.X and million billion sales to $XXX to Specialties $X XXXX sales to to net Slide We $X.X are with billion present corporate.

are range expected to $XX million Corporate costs XXXX million. $XXX in and between

our decrease XXXX nonmanufacturing favorable the seeing to costs operating are expected cost the and in in improvements excluding structure. We income benefits prior Corporate the year. changes in interest of are year-over-year, our FX and

$XX market full approximately included of XXXX offtake price additional and than $XXX of that earnings. onetime kilogram equity productivity Albemarle's reduced presents X storage together, for our assuming all average company price Recall XXXX, energy Talison. each comprehensive million at income compensate the slide roll-up from more market pretax cost year the in per for JV consistent partner to it improvements scenario. expect lithium by LCE equity Notably, Adding we a

to Turning outlook Slide segment. XX for additional commentary by

in ongoing Energy be anticipate due higher the slightly For we volumes Storage, Salar to yield of to improvement Chile. year-over-year the primarily ramp project

addition, and In ramp fixed which reduced cost our and helps conversion volumes. to Meishan tolling result sites, we including absorption Kemerton, improve in continue

with of contracts. other contracts, and on were Last volumes our salts year, including that we about sold lithium X/X long-term indicated agreements both floors

our we've of are sold modeling. For on excludes that lithium This salts to XX% now floors. contracts volumes agreements long-term simplify indicated other help with XXXX, number

have contract renewals we no Our contracts to continue this perform, significant year. and

to year. contracts with sales continue giving have volume We volume us for commitments, this in additional greater on confidence expectations our

volume-led We and strength Specialties driven year-over-year pharma, foresee by applications. recovery modest oilfield a in in autos

mix, Finally, execution for in productivity our in and expect enterprise. modest Please of turnaround Ketjen, to modeling continued to improvements refer our plan. we cost the across in deck the and considerations related slides results additional improvements product XXXX appendix

cash we and billion implemented have efficiency sheet structure fourth our quarter predominantly on our balance our enhance the and equivalents under full Slide available $X.X increased to our have cost We the billion in concluded cash flexibility. to financial of $X.X with and comprising liquidity also metrics The and $X.X measures operational available billion XX. liquidity Turning revolver.

As favorable our cash optimize to proactive reduce to of a adjusted debt expectations. with costs QX result ended actions net previous flow, of X.Xx, to and a ratio we EBITDA

the appendix. to refer please covenants, on information additional For

We ] have a single this our upcoming is [ [ year. in X/X% due November of maturity, XXX ] EUR at which notes million

Given managing maturity. is no evaluate the favorable urgency there we to to refinance, rate, continue options our immediate for this and

shows improved converting into operating and our and cash, flow execution management. XX our cash due in on to earnings cash operational focus Slide conversion discipline evident

target XX%, of cash range. operating long-term improvements dividends XXXX, with by and and from operations. sales was XX% inventory Greenbushes our cash This volumes across conversion target and For Talison management aligning was increased our driven higher surpassing

as conversion XXXX, year X completes below million Looking working at dividends Talison market target exceed Talison project we expect in to the a expect flow to long-term CGP and Nonetheless, the above signed prepayment. delivery at ongoing contract and Greenbushes X we cash XXXX, of cash in remain historical our mine. improvements to averages for XX% operating a prices. from due This years to recently spodumene customer relates to next prepayment $XXX our index range, the lithium capital over salts the

cash other are our capacity enhance We enhancements. bidding you cash paying off. efforts cash As cost see flow ramp-ups, line free in is measures breakeven productivity this through events, year. free management, conversion cash cash flow focus our to and This sight flow of now evident here, flow have and expectations and new inventory operating to conversion

the the Turning Slide comments lithium market. provide to will of some I on conditions XX. current

of policy and our We are of process market recent the light longer-term developments. in forecast updating supply-demand in

to a expect not the a We The of our our energy global transition to Lithium transition first drivers with quarter comprehensive remain undoubtedly matter provide and is It update remains long-term business if. crucial strong. energy the results. of progressing. more is when,

highs are and influenced In QX quarterly achieving and XXXX, PHEVs. record different preferences electric December BEVs new Sales all-time with vehicle of registrations models. in by Sales for availability year-over-year. increased by reached XX% cost both the a and customer

fallen combustion those EV year, critical the below affordability. early consumers internal $XXX supports kilowatt will pack next As have find as engine Global hour we to that average, EV costs vehicles. relative anticipate the prices which battery comparable per of

picture. also by less well, global and nearly portion X% driven Plus, storage years nearly only demand constitutes of EVs of now a Grid represent XX% by few is demand, in the storage from a ago. increasing performing up lithium in demand the United exceptionally States XX% XXXX than year-over-year China. installations Grid broader

On been facing and conversion are and producers several curtailments hard upstream the both Nonintegrated have larger announced supply there remains rock downstream. pressure. integrated side, unprofitable

either least cost pressure unchanged. We cost on that is at XX% resource the of estimates of Our global think below curve the at curve breakeven. global or are

XX balanced availability about and the may had important far, plug-in emissions with driver challenges, growth long-term and XX% expands. trends hybrids. America potential XX% China's price in to XXXX. regional by continue and the the affordability. XX% XXXX trends in weakest Overall, global dynamics potential Europe global demand. more of the key market reinforce consider due subsidies highlight grew battery for targets by growth are reduced model and year-over-year economic industry with industry's demand now growth to region. increasing Slide the year-over-year due EVs factors these to U.S. but subsidies details cuts was but demand the that confidence as improving to North boost represents China by EV demand driven

it now I'll hand back to Kent.

Jerry Masters

you, Thank Neal.

leadership our major will competitive to These sustain structure. are the Slide cycle. I position to measures across be implementing initiatives discuss and us XX. will the Moving enable cost our we reset on to

to significant to is $XXX new million capital measures essential including actions we XX. Moving recent and This cost we toward million at within improvements, to It as year, navigate place and business current and target of several we Chengdu financial have Qinzhou, implementing $XXX are initiatives the XXXX productivity our quarters our expenditures conversion plans optimizing efficiency we progress reducing environment. and Slide execution the context as network, refine the improving cost our our over enhancing with flexibility. for been

we year price free cash as together, as to in breakeven confidence our now Taken this levels. early achieve have ability greater current at flow

response comprehensive competitive advantages Our long-term our in designed initiatives and to to sustain market conditions. are

potential continually adding actions we as the to our As persists, so of that adapt list necessary. we are dynamic can environment

The Turning for conversion flexibility. market need underscores shifting additional product details. to diversified a the with globally Slide for XX network

our As at in both from the Negra are production and Chile mentioned, lithium we Meishan production carbonate assets. previously record and hydroxide plant hydroxide the carbonate achieving plant La lithium in China. optimizing

to have produce lithium improvement mix. is of plant annually. and a relatively network approximately market opportunities, Chengdu due maintenance Chengdu decision have tons capacity to our we we made conditions reviewed and on small conversion X,XXX to care a As our the product for hydroxide shifting with place plant

Chile, approach in service customers and will through and China supply will the to enable ramp better our larger leveraging high-quality network to us efficiencies provide We secure continue Australia. newer, driving those to of plants This while scale. customers our

battery-grade capital-efficient Australia, demand. strong commercial project hydroxide of shift continues highly facility Moreover, partially and capacity have first In the to lithium to hydroxide a identified improve, recently to commenced carbonate response site to conversion from Qinzhou performance our market in at Kemerton we sales. its

is and On the progressing we Salar nameplate resources. towards front, preserving on and resources yield project a XX% operating capacity. of the has value maximizing advantaged are The milestone improvement our exceeded focused rate low-cost

team, for expertise, X XXXX, produce in Greenbushes, fourth JV the brine CGP the capital expected increased for hydro resource. the in Please is recoveries XX providing operation lithium for first more Talison volumes technical The its quarter details example, leveraging the are Greenbushes' every Slide stage maximize geological feedstock salts optimize undertaken at our and with ore in to together to We our mine. mapping, XXXX. partners, life studies refer At over to has additional of of on considerations. of cost to

over of achieved XX% $XXX the as our $XXX improvement We've million to the we execute plans. moved quarter million announced to last quickly cost on

run Our sooner. goal a is possibly rate by full year-end, to reach

with XXXX down a XX% CapEx on XXXX. reducing and cost $XXX improvements we're more $XXX million to $XXX on priorities environmental result review core our XXXX capital will assets more stems million, detailed of than safety, to year Additionally, projects. from expenditures by reductions. million focus Full health, from This

being Moving competitive by framework and creation to value company the intended advantages The strategic XX. Albemarle's preserve are position Slide to for Slide as actions the taken long-term on XX. outlined

Our continues guide for strategic as modern how transforming framework critical lead the in we world living. we essential operate ingredients into resources to Albemarle

our is shifting The including growth electrification, purpose-driven. still want energy demographics. of across We and we markets serve with health, core energy, the to lead vision mobility, unchanged. population Our secular be and connectivity and enormous are growth impact opportunities businesses same. transition, have the Both

highlighted I Slide on row and And which of that detail competitive in strategic advantages. more on highlights want to next XX. feature they're boxes, our

aiming unmatched toward are therefore cost enhanced advantage advanced and and process resources our is chemistry assets. high-grade this the our are used past and savings capabilities. low-cost large-scale, increasingly innovation industry-leading incremental We've and these core in with This First, growth through capabilities growth for now opportunities.

collaboration integrating key. to Customer us customers user, understand markets. in focused lets the We dynamic from with stay the and shifts, both the allowing final market on trends to resource end adapt centricity Close is technology us customer product. our and

We that continue reach. get for and our with our customers positive Albemarle to scale feedback to seek capabilities, work

communities Lastly, people promoting in team and supporting our It value business sustainability our and across all the underscores where is lines commitment to our and proposition we our fundamental. by planet stewardship operate.

while that has changed, question framework strategic execution no has is There our adapted. certainly not our

We have implemented and to our agility. initiatives enhance key several operational efficiency

have is innovation and made the research in investments development. evident Our strategic commitment in we to

practices forefront market remain includes and the This sustainable next-generation of and are the to We to we lithium flame exploring cutting-edge developing retardants demand. industry. technologies polymeric ensure that conversion at optimizing shifting meet

with reducing to without Innovation and out is advantage project and both incremental also projects core sustainably We're allow process our we Chile us yield pumping. production like the to that in Jordan driving increase in call preserving cost more of Salar upgrade NEBO, innovative capital also improvement intensity. which brine resource an

by and tools, to example, improving For analytics time. advanced processes in real digital monitor leveraging our ability and optimize data we are production

excellence, value for stakeholders to sustainability we aiming remain to create Throughout and sustainable fostering a our more while operational future. safety, changes, these dedicated long-term

Slide while solid company's decisively maintain delivered the performance acting Albemarle position cycle. long-term the on to and preserve growth XX, summary, optionality XXXX industry-leading In through

XXXX considerations year build on performance. enterprise-wide progress strong storage full project to outlook the ramps improvements, we've Our made drive and energy cost contract company

leader, global We remains the can we are steps our markets. actions secular ensure our competitive across on broad-based long-term opportunities right confident we and cycle. Albemarle capitalize control control the am maintain competitive and a to taking and taking proactive are in the position are we focusing to what to on I

on operator face-to-face to begin to like events over you with forward that, the portion. Slide call upcoming And turn the I'd back look seeing here XX. to the Q&A some at to I of listed

Operator

from question at Instructions] first Our Patrick [Operator Cunningham Citi. is

Patrick Cunningham

follow first reset renegotiation on I had recently we agreements, most agreements question those the then remaining guess long-term spot That piece my contract floors? is and tranche those any mechanisms? respective there up for assume was came mix. XX% significant long-term And should any on of that in not of

Jerry Masters

Yes.

the that pretty about previously we've reported And comment XX% I that that's -- about was moved, much we've it the index your other on a contracts. good X/X at shift mean, So assumption. is

some with have floors, now We of reporting had that we're out that pulled contracts contracts that long-term So only floors. we definition now. didn't and

So in we that recently any XX% has up. had near think have we've or renegotiated don't term I floors. come the that

Patrick Cunningham

if the And most helpful. reading I'm resource was devoted That's Understood. to seems correctly, chart reduction like it the CapEx CapEx of previously the base.

repossession And where quickly you brownfield in given XXXX how program, back the additional and can So investments invest cutting to volume in support you resources? maybe beyond? are higher and growth current

Jerry Masters

pulled it I some that's the we've bit sure you right. then we resources more have back initially, and out gotten X not I'm we pushed many mean, highest-quality, mean, time. we're of of as and out on conversion I we pursuing little a and -- lowest-cost back, getting as if capital focused the go lot a was we're not kind at Yes. focused and resources on very resources were

that look the the a we now getting And piece conversion, think to initially. we're operations, on back least we've resources from more on cut at on biggest, capital, sustaining was our have big I as if you focused it capital little then well. a So at and plans, cut bit of

mean, of kind little out number running we 'XX we -- times period we to of can a over said And a a XX% we've that the start we And can bit. think think, a I grow of 'XX. I from CAGR theme at

And lot about most growth after rates that of -- those 'XX. So is a resource. down come that of

Operator

of is with Hoffman Bank Rock from next Our question America.

Rock Hoffman Blasko

at actions adjust placing how actions maintenance and of analysis? further the your market? under including if And CapEx low end your cutting the influence Chengdu stays pricing care the scenario Could might and broader

Jerry Masters

impact the do think our will said actions at you market. think I Chengdu we So

we're it's so. mean, conditions because I don't that doing -- and I think So product mix. of market no,

market ], Meishan assets carbonate smallest Qinzhou in why that we're larger So which that much. one other probably have as an -- small our influence up we still Kemerton And hydroxide is Qinzhou. we Chengdu capacity well. shift investment to because opportunity facilities, wouldn't Xinyu from product ramping then it's that some at is as at to and [ then of the And a make not and

Rock Hoffman Blasko

to guide it. And able the the be you would in tax wide range Got for XXXX? explain

Neal Sheorey

variety the have driven in This deck range we Yes, scenarios wide the here. is is Neal. the the page so that by really or of on

why tax rate we of really reasons we couple took in kind quarter overall few an the fourth as allowances. of where evaluation tax been is jurisdictions that, the XXXX the had we've seen odd of in last quarters, and a reporting losses in One over you've

we therefore, some our the tax So that Australia, two tax China to to tax allowances. Those didn't particulars line. we get where particular in recognize and in expense have take require are credits those us valuation jurisdictions

wide And on influence ranges, is guidance a based what the that Obviously, kind XXXX. the mix. price range, very what our tax has at did you're have our really at range, to rate to rate and similar lower end you the go on come there's our if to our So the that we about geographic rate of we more end lithium of why is said a tax the variety statutory on it's income. where in the pretax of of kind higher run

Operator

Isaacson from Scotiabank. is Ben question next Our from

Apurva Kilambi

for on is Apurva Ben. This

cash of sight free line the in discussed being breakeven you've to flow So XXXX.

case at the all just that dominoes in anything collapsing? just put place? the that -- achieving could falling beyond pricing that really is of Is risk is there So

Jerry Masters

right? -- our against just do execute to Well, that. that is have plan, I our plan So we to

against those. a pricing execute of they're -- one pretty plan. have And be But to we aggressive have We that. would look,

so think that We against executed actions it the pretty see we've taken. You far. well

we accomplish execute but -- just to So need that. to

Apurva Kilambi

is all did or look sense the then could these plans And of revised of as capital no with a kind XXXX? for stage, that picture form laid what that of any in you do the the magnitude last that at in And need that folks this you've actions all raise know you've there planned? given convertibles. out, foresee Perfect. if like? what I of any follow-up, kind Is of so, you longer preferred year, a

Jerry Masters

Yes.

we being equity that taking these right? again, don't So we to -- through all that -- do ourselves positive we execute plans see and against an we have free cash we're So do actions have but we that, the and flow raise. are so to year, don't

Operator

Bank. Our from question Begleiter is David Deutsche from next

David Begleiter

and Kent, on lithium what in between realized sales? your was difference in the spread your prices sales QX, contract spot your

Jerry Masters

the piece. pricing normally don't we So report exact on and contract our particularly on

So to I'm going decline that. respond to to

David Begleiter

Understood. has still prices. roughly I you to due supply that -- QX, was Or XX% a Is and were then? XX% lower moved in curtailed global estimate? up of lifting back shut good that believe saying to down or since it

Jerry Masters

Yes.

about we think we the XX%, that's still saying we were believe, So case. is And think I underwater.

David Begleiter

But how shut is down? or actually curtailed much

Jerry Masters

Yes.

So it's would numbers probably -- about of And still hold. I those think I say. half about XX%, that that both

Operator

next Our JPMorgan. from Jeff from is question Zekauskas

Jeffrey Zekauskas

scenarios, X, change billion? that were Slide billion complicated the adjusted between slide where be EBITDA $X.X your would energy if it's is prices, provide you no contract more and of the storage prices today, than of that? $X.X there you're lithium Or On -- different in because meaning this

Neal Sheorey

Neal. is this Jeff,

that, at book going realized prices, prices get our of slide look, I the you business, that latter our what The and see are think take answer observed of move prices you it -- you is our prices the are how is you then of towards the described be but numbers probably these not ranges. that of part below through market kinds if that price that EBITDA my market to prices. those market top

Jeffrey Zekauskas

full Are spodumene Talison assume But currently has then price. full assumption, XX% below that And What mean? sales sales pricing what Okay. full already assume you LCE have what you receiving to does say sales Talison of receive that? Talison you volumes? And you do to happen Great. say is volumes. volume? on you the you aren't for spodumene right-hand the some is you prices average market and column we And

Neal Sheorey

partners the by Talison forward What the all me you hasn't full let that one. at our their the years, been is full case assumption the Jeff, if allocation. made. Yes, second that we've the always volumes sales mean taking Talison assumption is back the go over that's That are case. but going we is That take

where now full taking -- sit We're now. allocation our this case As I is in environment. the right promptly right also is that

regards of average from XX% it to look, With X% the in spodumene range. of price, kind point, moved has over your anywhere to to of around time, XX% -- LCE the

to was can how So at sort in, to point, in it and XXXX. picked what we of market wanted do and something least with we shift in that just put it terms these because observed the does dynamics. a was of done XX% considerations, that But we your mark around we've recently

Operator

next question from Roberts Mizuho. is John at Our

John Ezekiel Roberts

flat for you where And X% from? XXXX to then at is guided XX% confirm IGO volume growth, Greenbushes. your believe I for Can the XXXX essentially that? growth coming

Eric Norris

very expansion X of John, this CGP come of not the year. last CGP was utilized, until XXXX. was Eric. the in correct. Talison fully That's which does X end on it's

So there and that lumpy until capacity. of is That's sort Talison no growth of as on. nature comes you appreciate, know the bringing the, on capacity at

Our march yield project continues effectively XX% where on is the coming La debottlenecking all growth of plant nameplate. Chile, towards ramp to out -- to over X% and Salar Negra drives the to guidance

John Ezekiel Roberts

sustaining targeting pricing? XX, Slide X% targeting right CapEx that the get given of on then in And to sustaining the volatility percent way X%. think you CapEx about Is sales of you're to the

Jerry Masters

Yes.

that's the point. So right -- we

also aspirational on a market, -- for and at right? market. stabilized that we we think we're we're us say bottom -- of the and the at because but So what not there, moment we So is the it's

We're is So we it mid-cycle that and there today. that. it's can have a wanted do to we getting on have to where we're still at. benchmark at We a we around to We that. say that benchmark. work aim level out a pricing good go focused some But not

Operator

is Our Markets. next from Joel from BMO question Capital . Jackson

Joel Jackson

I follow up Ben's to associate's prior on bit a question. want little

XXXX, to stick you how the where your of And prices -- spot you're be sheet there renegotiating talk of can the what balance around Do much if floors to the if about you XXXX? are and do half we floors negotiated? about floors? So for contract you have how think with sales are they leverage expect go

Jerry Masters

Yes.

the over something, guidance So They -- time 'XX. for they 'XX, adjusted. don't That's contracts as they want that is our we look, something, adjusted usually get renegotiated. we have and way And happen. wants time. and they But not then they our worked to we customer expect provided end get how don't work over

You has is market. China spot coming more got growing. market. our on portfolio with recent ramping. the contracts the a see become a there past. because in new oriented It's capacity That's little biggest of spot bit It's We've Meishan

that's has shifted. So really that why

I suspect and to how an that end. that time. Our we've simply over that's just negotiate somewhere two, come contracts them going going it's terms And to We don't or forward. along play and extend out out done year a

Joel Jackson

bringing then maybe some seems supplies weeks. going bunch although some cap your Okay. the half last it just There's behavior -- in And underwater, We is mine -- like on, downstream maybe that's production battery. of quarter the estimate, a of curtailed. on back or quarter about lithium a those and talking rational of with CATL

in I is actors So it there if such do how as are industry seems and you same manipulating And market? any have other price, mean like for mean, continue? there objectives by recovery this that I material maybe behavior in public act companies. such don't actors hope maybe this Albemarle the are

Jerry Masters

Okay.

the all comment making can bottom if know we're I on pretty of the focused at that cycle. say would don't sure I I that. So compete on of we can

taking you us that. when see targeted And and actions have so at

a that cycle growth and our growth of much we and on back back result that of more more when on can driving we capital making take focused of market cost on sure the cost, higher capital pulled at out that advantage business, So pivot growth the to prices. not as reduce as then getting comes compete the and that, to

we're approach that's that the So taking.

Operator

with is question Our Stanley. Morgan from next Andrews Vincent

Vincent Andrews

And being then, just free prepayment. that I the talk up the else start as less? well be a you million off year. equal follow included which all million with, does conversion $XXX as XX% million. you're would And to mean customer wanted cash neutral $XXX assume on this I year flow about that's assume cash including when clarifying I flow would question to the next be, $XXX

Neal Sheorey

So this Neal. -- the is Vincent, on

are On correct. the part you of first your question,

you So here. the conversion let maybe And me included over regards for XX% XXXX, give things looking our cash in number $XXX million just to think with of about is to to XXXX. two

won't $XXX that, recur that will XXXX lot are in that there million things other and that to But standpoint again also from cash actually start in You remember correct us a beyond. of benefit a are XXXX.

point be JV perspective, One this through investment they're going a of the that is program key out the a from right program. of ones large That obviously done now to year. that going I'll end is Talison at

Talison So expect a even -- environment, is this we in you very would expect, as would low asset. competitive

would we JV from XXXX. we So get expect as payouts to a into return the dividend

Vincent Andrews

your follow-up reconciliation for And I question. working you as for But capital. the then thank starters, cash statement, increased flow on a on disclosure a just have

was $XXX value it's new says million. And adjustment. a item positive Last year, this it line a a $XXX have realizable net million. year, You negative inventory that

else I'm that? within is just can detail reconcile provide would operations? what be any helpful. from somewhere does you wondering, that flow line So cash more Or Or

Neal Sheorey

Yes.

market lower predominantly quarter cost of took adjustment going reflection line, of a Vincent, is of that to we fourth be XXXX. in or that So the

line -- that's that's adjustments, related best those so the so see the to most and you that of that. is why And

Operator

Our of KeyBanc. next is from from Yefremov question Aleksey

Aleksey Yefremov

talking If about you maintenance you're at look your CapEx, level.

do willing change, XXXX? And these be level so get don't can under you market prices would conditions? you to that maintenance to Assuming in

Jerry Masters

Yes.

going for that is But aspirations like commitment a I'm are 'XX. want those make get at our maintenance So -- to for capital not particular to capital we level. to that

we So growth our in opportunities, have opportunity saving cost -- smaller say, or still growth capital opportunities, investments.

able the year. talked a from shift is good low that to investment Qinzhou carbonate of call the to millions single-digit dollars. example about So that, were of a tons XX,XXX about hydroxide we on We

project -- that pretty great So that's and capital. return low and

there cost on doing to at for the savings that's look X% maybe now X% and mid-cycle, tend focus so in that So work to and an and Whether out for not be those. get like answer Qinzhou. continue focused Those I drive we to 'XX or that. that. But incremental that we can't detail continue not, laid growth, we more to, we what 'XX, at try to aspiration in plans to to we're we've

Aleksey Yefremov

of on your cost on this next flow kind that delays, cash how of X, your point for important for overruns, it's year And risk the especially. comments CGP thing? is going and project project Any view? Like assessment an from year

Jerry Masters

Yes.

or schedule on know around budget. we're whether a but we're it's think a I close right on don't not, and perspective. schedule I budget from budget exactly and pretty

Operator

at Vertical Partners. question next from Research Kevin is McCarthy Our

Kevin McCarthy

EV your on about XXXX a prepared you or the Kent, higher little customers is or comment grid storage in Can remarks. arena? about share in talked the in your end you storage the lower in as your bit outlook it grid market? in is And for growth that same your

Jerry Masters

Yes.

for been So the us a few as has surprise positive grid one for been that's it's now years storage growing. a been

this but the And solution the grid looks is grow. anticipate lithium come storage, I popularity And it that to down couple we and continuing not almost LFP, a thought grid I would was for to we lithium-based the way ago, think may be up year. be of best of probably XX% years forward. costs and have LFP-based going battery think storage like it going have

And I opportunity. kind good it's on think, a -- of, it's it's So everywhere.

out. play starting So to the U.S. is

in then been that really see China has and that. around You Europe, strong

little it's well. saw It's growth in positive. a plug-in between as of hybrids EVs bright than bit it's So a and some BEVs shift we less and little and of the the a offset a spot

covered and build it's nicely. that in So

Eric Norris

as largely market for it's of LFP the share, Kevin, first And an all, market.

It's the So cathode if similar to our the that materials battery storage. at are our same It's on you look the EVs, LFP in and share PHEVs, that. be into back grid into can share deepened et cetera, chain in supply companies. providing

relationships, those end not shares, markets. the our necessarily determines what that's So

Kevin McCarthy

company then today you were And managing as tariffs? than if to specifically secondly, tariff to you last evolve year continue it Understood. the regimes any may, here. the Kent, Are relates I differently

Jerry Masters

don't our I to some, us not but big part we're I our is But what we're knows It's not ship we impact attention U.S., be. evolving. are China Look, company on from significant. very see direct -- a be not impact will no the final of will Albemarle exactly sure, managing the to There impact we will customers going mean, differently? that mean, the significantly. the happened. directly. than to close it's not I'm what business. one It paying So impact it more is

is really effect to. attention what knock-on the we're of So something is paying us

Operator

from is Our Alexander Laurence from question next Jefferies.

Laurence Alexander

of questions. So a couple

long-term to First, compared is market? your on much contract under of how Energy EV the Storage, capacity

Jerry Masters

you Laurence, question? I'm said was sorry, storage fixed a that --

Laurence Alexander

. The Energy much contract? your business, is that Storage side of under how long-term of

Jerry Masters

XX%. about It's

Eric Norris

that's Yes, about shorter is and XX% We of contracts. pricing floor-based of the XX% The talked contracts same, mechanism the contracts. in it's not It's are the spot that a under Laurence. mix the spot. duration being

Jerry Masters

may just Yes, clarify there.

to those XX%, sit are some we have and There when those we agreements. what agreements we floors. long-term agreements, we on are so have don't longer-term So floors other

category categorizing same now as spot. in not we're the So

Laurence Alexander

Okay. Perfect.

$XXX cash if For bridge? an is then conversion 'XX EBITDA Or net be is there the be or show the the there XXXX effect million just impact the to but that clear, that in to up also would EBITDA cash the -- also -- EBITDA suffers? of on an related inflows, would

Neal Sheorey

Laurence, Yes. kind circling of right the think I here. you're on mechanism

the prepayment So first upfront quarter. received already taken it we have in the and here

results. obligation next quarter over we the with years. And deliveries first our then You'll our see X through product that actually satisfy

are prices -- market. indexed So and that to at that's

you are So right.

course it We then deliveries, is of recognize over the as X the next those make will years. EBITDA increments we but in

Operator

Deckelbaum is from question David next TD at Our Cowen.

David Deckelbaum

some to and up hoping capture to product plans hydroxide as very further was views decision seeing Or being seeing to customer follow do carbonate? conversion expect the necessity a to this the appetite really pursue pivot hydroxide, Should at convert resistance further have to sell on I are hydroxide? you're carbonate Qinzhou there the for of then time hydroxide is plans now just for versus differentiated you market mainly volumes in over from plans? Are capacity to margin? at in more this we And just point? the to on this just just discrepancy you the

Jerry Masters

Yes.

is Carbonate growing. hydroxide, mean, it the hydroxide, it's I look, there's market -- faster. So is a growing

a gives was stronger for flexibility It's capital, take shift. to more opportunity demand execute there's The have take kind the market a before. unique said order that. as that. so for in designed very had It's few us around advantage make And market. to advantage in to small of we this in us single-digit a millions of because stronger this that now, plant So carbonate. was of It things -- can against there's way. we low carbonate I is And we

to we this sense the it we be investment, we Over to the that finish time, about carbonate. capability. carbonate. to fact the if kind had to more be back in either was -- to or wanted go way. and It's makes order can the stay to shift designed of some and upfront, hydroxide leverage able on go At Once we'll we this on market back make moment, we this in could work

David Deckelbaum

tolling Or that? a you significant that that lean more is of year to this would do more carbonate, part? to capacity would sort your China and beyond on in into wanted heavily enable there you be the to available If investment have next

Jerry Masters

flexibility taken in the And it yield has around in particularly as you our Salar. then at that gives but us tolling Negra growth of past, us see in and from that there's the the on allowed available No, advantage of and in grow at that's capacity of Chile kind that back supply Negra, La with the Salar market, to the particularly us La well chain. -- work we've

Operator

Our next question is from Benjamin Kallo with Baird.

Ben Kallo

maybe and up just same the have indicate question ago. prices coming than rate it years going different. for which earlier of an demand prices maybe to even up off-line, should There's follow going down time, at slightly of to a going a that down. frame and we predicted coming slower utilization EVs wanted happening, capacity with up, couple been I At all

talk help change that can is understand to that? anything So anything us would you what then and to that

around like bigger in And do a your of well. that's I lot then becoming reports on impact industry my It China. the is, recycling there. seems that just pricing as follow-up around question I'm a see of wondering thoughts

Jerry Masters

Yes.

excess China recycling are little been cost of And down, that but for sits come There prices new time. right? capacity conversion not just economic the there is a actually is mean, has drop with in well. question, in has over in come a your There's capacity. in as higher that lot -- I also prices market, mean, -- that there's pieces new I recycling because seen recycling the So it moving So we've China capacity growing has off then off, where it's part. We are bit given material. come on.

through would assets All out, It's system. has higher It's going coming work is particularly. I market. But cost of hard that way -- to anticipate work to the its way its say. dynamic to a

not quite main of is growing got North coming This Europe from And as growing. We've but it plus, but the still market America is growing are of we're significantly. it's still XX% China that, as driver had still just right? So and high anticipated, -- there. kind is growth we rates

explain of market chunks comes Capacity be going this period for in there's in relies It's know if more lot but is are be growth it time. don't to market opaque I and in that. than a long balance, you a happens down. very on get prices So China, the particularly it it basically to of because going a can I -- it supply/demand. in on and

Operator

Josh question Spector UBS. Our from comes with next

Joshua Spector

Or Is some prepayment around on volumes? you investments to to you to ask given I your customer cash preemptive focus got. needs that was there expectation something the requirement further CapEx do there or the spending? that any decided on and just wanted make just for

Neal Sheorey

further there's No, no side. our Josh. Yes. requirement on

be to would a you of to I'd that We say satisfy contract. we little said, able And it bit have the what part need I differently. last everything say just

And done these went we We have and our that opportunity after. prepayments the unique kind this was discussions all came time. of in customers just was with across the desk. past, a it one We've actually that

many we ways. how of a sign our just So partners with it's work think I different in

Joshua Spector

Understood. heard cost the that's up temporarily where the against supply guess, follow more prices any moved being about view guess maybe I've some questions, prior mixed closer to I some happening their things the CATL guys around specifically have restart. being versus just driving so And market price on the tighter with why internally environment? in towards line, I Do you low to have restart,

Jerry Masters

coming I say, would in. I Look, No. look, we'd modeled lepidolite more mean,

had exactly short lepidolite weren't But resource. resource, that They're be came not is domestic we of China the volume. this get So market. to They're asset, targeting trying we It's on. surprising. particular back more one strong growing. a

-- think it's than no it's I think complicated that. So more I

Operator

from Our comes Castanos Berenberg. Andres from last question

Andres Castanos-Mollor

tolling XXXX would the much be would left? lithium volumes, be how Are it of much spodumene any salts there significant Of how volumes lithium sales and sales?

Jerry Masters

little prepaid that, So I 'XX. in spodumene a bit -- other don't We for do that we split, There's we've the that a right? the mostly have lot more are that. than do transparency sales salt, of spodumene that. of understanding it's perspective. sell There's really some market, not shifted but that from There's a in in

Eric Norris

that the of production in It's basically Wodgina. XX% . of magnitude. this under coming year XX%, order total LCEs Yes. of out It's roughly

Operator

have it you. will That's all we to for the closing questions. now back pass I Kent Masters time for Thank remarks.

Jerry Masters

framework strategic operator. and have successfully us long-term dynamic execution maintain you, conclusion, In our operational navigate conditions market competitive Thank and Okay. Albemarle's strong to positioned edge.

today, together. delivering to sustainable our to value care. continuing we and safe journey for us you and growth. joining take driving Thank stakeholders for forward our Stay and dedicated are We look on

Operator

you This call. participation. your concludes today's conference for Thank

may now . You disconnect.

Albemarle (ALB) 13 Feb 252024 Q4 Earnings call transcript